Blue Mass Group

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SJC decides Billy Bulger pension case

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In a decision issued today, the Supreme Judicial Court unanimously decided that former State Senate President and UMass President William Bulger is entitled to credit toward his pension the cash housing allowance he received from UMass, but not the payments made by UMass into an annuity fund.

According to the opinion, Bulger’s base salary was $309,000 a year when he stepped down.  In addition to that, he received a cash housing allowance of $2,419 per month ($29,028 a year), and the university also contributed 7% of his annual salary ($21,630) to an “appropriate tax-deferred investment vehicle.”  Because a state employee’s pension is calculated in part on the compensation the employee was receiving at retirement, Bulger sought to include both of these amounts in his compensation, since doing so would increase his pension.

The SJC’s decision is quite technical and depends heavily on the precise language of the pension statutes and on past SJC cases interpreting that language.  There are no political bombshells lurking in the decision, as far as I can tell.  Bottom line: Bulger will get some, but not all, of what he was looking for.

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  1. My recollection is that this case could create a precedent throughout the pension system.

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    MANY state employees are paid different types allowances – for instance, I have a friend who is an admistrator in a prison, and he is paid a clothing allowance.  Is that amount now added to his base?

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    Also – does this decision make legislator’s per diems a part of their pension base, as it is money paid for housing and dinner?

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    I remember brother James’s case was important, as if he were allowed to collect the pension he lost for committing perjury were restored, it would have also created precedent for cops who lose a pension for misdeeds.

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    We in the hinterlands of the Commonwealth really do owe SO MCUH to South Boston and its demented voters….

    • The housing allowance payments at issue were “recurrent,” “regular,” and “ordinary” remuneration for Bulger’s services as president of the university. We do not accept CRAB’s characterization of the housing payments as an “administratively workable method” designed by the trustees to reimburse Bulger for the additional expenses generally associated with maintaining a residence consistent with the position of president of the university and suitable for entertainment purposes. CRAB’s position ignores the factual findings of DALA, which were adopted by CRAB, regarding the manner in which the trustees established the housing allowance as part of Bulger’s compensation package. According to those findings (which, as stated, were based on the parties’ stipulations), the housing allowance was never intended to be used for housing. The trustees were fully aware that Bulger would continue to live in his South Boston home throughout his tenure as president of the university. According to the chairperson of the trustees who was responsible for negotiating Bulger’s compensation package in 1998, the trustees felt at that time that Bulger had done an outstanding job as university president and considered Bulger’s acceptance of a housing allowance as an important enhancement of his compensation package that would motivate his interest in the presidency for an additional five-year term. In view of these circumstances, treating the housing allowance as anything other than “other compensation in whatever form” would render that term in the statute meaningless. “Unless it is a technical term, ‘words and phrases [in a statute] shall be construed according to [their] common and approved usage.'” Hallett v. Contributory Retirement Appeal Bd., supra at 68, quoting G. L. c. 4, § 6, Third. See State Bd. of Retirement v. Boston Retirement Bd., 391 Mass. 92, 94 (1984) (“we need not look beyond the words of the statute where the language is plain and unambiguous”)….

      The payments into the Vanguard account, on the other hand, fail to meet the threshold requirements of G. L. c. 32, § 1…. The statutory definition is precise and makes clear that “regular compensation” does not extend to payments made into an annuity fund on an employee’s behalf unless that fund is authorized by G. L. c. 15, § 18A, or by G. L. c. 71, § 37B. Neither of those carefully drawn exceptions is applicable here. We cannot read into the statute a legislative intent to include other types of annuity contracts, based on their similarity to those exceptions already contained in the statute, or based on the terminology that parties might choose to call the payments in the employment agreement. See Boston Ass’n of Sch. Adm’rs & Supervisors v. Boston Retirement Bd., 383 Mass. 336, 339-340 (1981). See also Commissioner of Revenue v. Cargill, Inc., 429 Mass. 79, 82 (1999) (“Where, as here, the language of the statute is clear, it is the function of the judiciary to apply it, not amend it”). To do so would undermine the legislative goal of ensuring “a minimum level of predictability in computing pension payments made out of the retirement system.” Zelesky v. Commissioner of the Div. of Pub. Employee Retirement Admin., 30 Mass. App. Ct. 106, 109 (1991).

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      Clear as mud, eh?

      • …my friend the Administrator, who wears civilian clothes but still gets the allowance, WOULD have it added, while his co-workers who use the money to buy uniforms would NOT.

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        Oh, THIS will be fun.

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